E-commerce trends change with each falling day but one thing that has been and will remain an imperative concern for the business entrepreneurs is Revenue.

Therefore a business entrepreneur running an e-commerce marketplace must focus on implementing pricing strategies which befit all the resources of a store (admin, sellers, and customers).

The most popular pricing strategies which the store owners mostly integrate with their marketplaces are- commissions and memberships plans.

These two pricing strategies help the marketplaces to keep up with the competitive marketing pace in terms of revenue.

Therefore let’s discuss how commissions are an essential part of any marketplace for admin as well as sellers:

Let’s start off with a simple use case example. As a flat owner, I wish to rent out my flat and therefore I hire a broker who would entertain the tenants on my behalf.

As soon as some tenant finalizes the flat and decides to move in, the broker would charge from the tenant a commission usually known as a brokerage amount.

Commissions usually differ for different marketplaces. A Marketplace M may lay a commission of 10% and another Marketplace P may lay a commission of 15%.

Moving on, suppose I own a Marketplace xyz.com and a Seller S wishes to sell products through my Marketplace.

Of course, if I am providing a platform to a seller for selling products, then I will be charging some amount as well. This amount which I am charging the Seller S is Commission.

It is pretty much fair to charge the sellers as they may be selling their products in multiple marketplaces. They are the ones who receive high margins of profits. Therefore it not unfair to charge them, is it?

The best example is Airbnb which charges a commission fee from both its customers and sellers.

The sellers rent their houses and customers befit as they get to experience a homely environment all through their stay. For such kind of homelike stay, the customers won’t deny giving the additional charges(commission).

It is completely the marketplace owner’s choice so as to lay commissions globally, on products, or on seller categories.

The marketplace owner may also decide to lay fixed commissions or on the basis of percentage. 

Illustrating the Commission Types:

• Global Commission:

As per the name, Global commission applicable evenly to any product or category.

For instance, if the admin lays a global commission of 5%, then the admin shall receive a commission of 5% every time a transaction takes place.

• Commission on Products:

The store owner lays this type of commission on products in order to receive a part of revenue if that product is sold at a higher rate.

For instance, the store owner may charge a commission to the seller for a book which is present in the seller’s store. This book is sold the most and generates higher conversions for the seller.

• Commission on Seller Categories:

The store owner lays commissions on the categories created by the seller.

For instance, the Mobile Phones category of the Gadgets Menu may be the most selling category, therefore the store owner may lay a commission of 10% on the Phone Category.

This type of commission turns out to be beneficial for big marketplaces where large inventories need to be managed.

The benefits of the laying commission on products or categories or globally are many, but the main aspect is that the store owner earns for every purchase that takes place through his marketplace.

Also, the sellers get a platform through which they can easily sell their products. Also, the store owners do not charge the vendors unnecessarily for exhibiting the products on their marketplace.

• All big marketplaces such as Ebay, Etsy, Amazon etc, use the commission model as a part of their pricing strategies. This is one of the prime reasons why they are the trendsetters of the e-commerce era.

That’s all for Opencart Marketplace Advanced Commission. If you have any issue, please feel free to add a ticket and let us know your views at https://webkul.uvdesk.com